Cash America Announces Third Quarter Net Income and Dividend Declared

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Cash America Announces Third Quarter Net Income and Dividend Declared

FORT WORTH, Texas--(BUSINESS WIRE)-- Cash America International, Inc. (NYS: CSH) announced today that net income attributable to the Company for the third quarter of 2012 was $11,703,000 (37 cents per share), compared to the third quarter of 2011 net income of $34,777,000 ($1.08 per share). The third quarter results included unusual items which reduced net income and earnings per share by $20.4 million and 65 cents per share, respectively. Excluding the impact of these unusual expenses, third quarter adjusted earnings, a non-GAAP measure, would have been $32.1 million ($1.02 per share), which is at the high end of management's publicly released earnings per share guidance of between 95 cents per share and $1.05 per share as reported in the Company's press release dated July 26, 2012 and above analysts' consensus estimates of 95 cents per share as reported by Thomson Reuters. The unusual items included $18.5 million (59 cents per share) in after tax costs associated with the Company's previously announced reorganization of its Mexico-based pawn operations that operate under the name Prenda Fácil and $1.9 million (6 cents per share) after taxes related to the write off of deferred costs and transition expenses associated with the announced withdrawal of the proposed initial public offering of Enova International, Inc. in late July of 2012.

Consolidated total revenue increased 10% during the third quarter of 2012 to $439.7 million, up from $398.3 million during the same period in 2011. Contributing to the increase in total revenue was an increase in consumer loan fees from the Company's E-Commerce segment. Revenue from online consumer loan fees rose 33% during the third quarter of 2012, to $173.6 million, due to higher demand in the United States and continued growth in foreign markets during the quarter.


For the nine-month period ended September 30, 2012, the Company reported net income of $82,990,000 ($2.62 per share) compared to $98,136,000 ($3.07 per share) for the same period in 2011. When adding back the unusual items discussed above, adjusted earnings, a non-GAAP measure, would have been $103.4 million and adjusted earnings per share, a non-GAAP measure, would have been $3.27 per share for the nine-month period ended September 30, 2012, up 7% for the period. Total revenue increased 18% to $1.3 billion for the nine-month period ended September 30, 2012, up from $1.1 billion for the same period in 2011.

Commenting on the results for the third quarter, Daniel R. Feehan, President and Chief Executive Officer said, "We entered the third quarter keenly aware of the challenging environment but determined to make advances on a variety of important initiatives to position the Company for next year. We recently announced that the Company has entered into agreements to add 34 pawn lending locations in the United States through two independent transactions, one of which was substantially completed during the quarter, and we began implementing a new strategy for our Mexico-based pawn lending locations to focus on full-format pawn locations and place more emphasis on lending activities secured by general merchandise. We believe these developments plus the continued growth of our E-Commerce segment will set the stage for fiscal 2013."

Cash America will host a conference call to discuss the third quarter results on Thursday, October 25, at 7:00 AM CDT. A live webcast of the call will be available on the Investor Relations section of the Company's corporate website (http://www.cashamerica.com). To listen to the live call, please go to the website at least fifteen minutes early to register, download, and install any necessary audio software. A replay will be available on the Company's website following the call.

Additionally, the Company announced that the Board of Directors, at its regularly scheduled quarterly meeting, declared a $0.035 (3.5 cents) per share cash dividend on common stock outstanding. The dividend will be paid at the close of business on November 21, 2012 to shareholders of record on November 7, 2012.

Outlook for the Fourth Quarter of 2012 and 2013 Fiscal Year

Management believes that the opportunities for growth in revenue and earnings will be largely associated with customer demand for the credit products provided by the Company, which take the form of pawn loans and consumer loans and the disposition of unredeemed collateral by way of consumer spending on retail sales and the commercial sale of refined gold and diamonds. The fourth quarter, during the seasonally important holiday selling season, represents an important period of retail sales for the Company, and results will be affected by consumer sentiments during the period. There are various other elements that could affect the growth in revenue, such as the regulatory governance of consumer loan products and the development and growth of new and foreign markets for the Company's e-commerce distribution platform for consumer lending products, as well as developments related to the reorganization of the Company's Mexico-based pawn operations. As the Company enters the fourth quarter of 2012, management anticipates that demand for the Company's consumer loan products will continue on a similar pace to the one it has experienced during the first nine months of 2012 with a continued heavier weighting to the international portfolio. Demand for the Company's pawn lending products has proven more challenging in the second and third quarters of 2012, and management expects growth in the Company's pawn lending business, but remains conservative in its expectations for the balance of 2012.

Based on management's views and on the preceding factors, management expects the fourth quarter 2012 net income per share to be between $1.15 and $1.25 per share compared to $1.18 per share in the fourth quarter of 2011, which does not include costs and other charges expected to be incurred in the fourth quarter associated with the Company's previously announced reorganization of its Mexico-based pawn operations (estimated to be between 19 cents and 32 cents per share). Based on the Company's growth through the first nine months of 2012, which produced earnings per share of $2.62 ($3.27 per share on a non-GAAP adjusted basis, adding back the unusual items discussed above of 65 cents per share in the third quarter), and factors noted above, management expects its fiscal year 2012 earnings per share to be in a range of between $3.77 and $3.87 per share ($4.42 and $4.52 per share on a non-GAAP adjusted basis, adjusted for the third quarter unusual items but excluding the unusual items expected to be incurred in the fourth quarter, as noted above), compared to $4.25 per share in fiscal 2011.

In addition, management is initiating its expectations for fiscal year 2013. Based on its current views of the coming year, management establishes its initial anticipated range of earnings per share of between $4.75 to $5.15 for fiscal 2013.

About the Company

As of September 30, 2012, Cash America International, Inc. operated 1,074 total locations offering specialty financial services to consumers, which included the following:

  • 815 lending locations (including one unconsolidated franchised location) in 23 states in the United States under the names "Cash America Pawn," "SuperPawn," "Cash America Payday Advance," and "Cashland;"
  • 160 pawn lending locations in central and southern Mexico under the name "Prenda Fácil;"
  • 99 check cashing centers (including 93 unconsolidated franchised and six Company-owned check cashing centers) operating in 15 states in the United States under the name "Mr. Payroll."

Additionally, as of September 30, 2012, the Company offered consumer loans over the Internet to customers:

For additional information regarding the Company and the services it provides, visit the Company's websites located at:

A reconciliation of adjusted earnings and adjusted earnings per share, which are non-GAAP measures, for the three- and nine-month periods ended September 30, 2012 discussed above is included in the attachments to this press release.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward-looking statements about the business, financial condition and prospects of the Company. The actual results of the Company could differ materially from those indicated by the forward-looking statements because of various risks and uncertainties including, without limitation: changes in domestic and foreign pawn, consumer credit, tax and other laws and governmental rules and regulations applicable to the Company's business or changes in the interpretation or enforcement thereof; the anticipated regulation of consumer financial products and services by the Consumer Financial Protection Bureau; acceptance by consumers, legislators or regulators of the negative characterization by the media and consumer activists with respect to certain of the Company's loan products; the reorganization of the Company's Mexico-based pawn operations; the deterioration of the political, regulatory or economic environment in foreign countries where the Company operates or in the future may operate; the actions of third parties who provide, acquire or offer products and services to, from or for the Company; changes in demand for the Company's services and the continued acceptance of the online distribution channel by the Company's online loan customers; fluctuations in the price of gold or a deterioration in economic conditions; changes in competition; the ability of the Company to open new locations in accordance with its plans or to successfully integrate newly acquired businesses into the Company's operations; interest rate and foreign currency exchange rate fluctuations; the effect of any current or future litigation proceedings or any judicial decisions or rule-making that affect the Company's arbitration agreements; changes in the capital markets; changes in the Company's ability to satisfy its debt obligations or to refinance existing debt obligations or obtain new capital to finance growth; a prolonged interruption in the Company's operations of its facilities, systems and business functions, including its information technology and other business systems; security breaches, cyber attacks or fraudulent activity; the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements; acts of God, war or terrorism, pandemics and other events; the effect of any of such changes on the Company's business or the markets in which it operates; and other risks and uncertainties indicated in the Company's filings with the Securities and Exchange Commission. These risks and uncertainties are beyond the ability of the Company to control, nor can the Company predict, in many cases, all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this release, terms such as "believes," "estimates," "should," "could," "would," "plans," "expects," "anticipates," "may," "forecasts," "projects" and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements to reflect events or circumstances occurring after the date of this release.

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
HIGHLIGHTS OF CONSOLIDATED RESULTS OF OPERATIONS
(dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30,September 30,
2012 20112012 2011
 
Consolidated Operations:
Total revenue$439,694$398,304$1,308,826$1,109,107
Net revenue248,477235,454738,869661,430
Total expenses 208,289  172,289  572,442  485,213
 
Income from Operations$40,188$63,165$166,427$176,217
 
Income before income taxes 33,046  55,503  145,160  156,838
 
Net Income$7,930 $34,529 $77,673 $97,561
 
Net loss attributable to the noncontrolling interest 3,773  248  5,317  575
 
Net Income Attributable to Cash America International, Inc.$11,703 $34,777 $82,990 $98,136
 
Earnings per share:
Net Income attributable to Cash America International, Inc.

common shareholders:

Basic$0.40$1.18$2.80$3.31
Diluted$0.37$1.08$2.62$3.07
 
Weighted average common shares outstanding:
Basic29,53629,53529,59929,626
Diluted31,37532,24831,64331,969

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)
(Unaudited)
 September 30, December 31,
 2012  20112011
 
Assets
Current assets:
Cash and cash equivalents$78,663$54,364$62,542
Pawn loans254,077244,441253,519
Consumer loans, net256,825191,642222,778
Merchandise held for disposition, net171,285166,365161,884
Pawn loan fees and service charges receivable48,77145,06648,003
Income taxes receivable684--
Prepaid expenses and other assets36,91232,09531,301
Deferred tax assets 39,826  29,070  35,065
Total current assets887,043763,043815,092
Property and equipment, net258,214236,325246,429
Goodwill599,337538,169562,721
Intangible assets, net34,87726,66834,771
Other assets 12,936  13,948  15,236
Total assets$1,792,407 $1,578,153 $1,674,249
 
Liabilities and Equity
Current liabilities:
Accounts payable and accrued expenses$109,986$95,574$113,113
Customer deposits12,94410,5889,935
Income taxes currently payable-10,52012,880
Current portion of long-term debt 44,205  21,856  34,273
Total current liabilities167,135138,538170,201
Deferred tax liabilities102,04888,98089,712
Noncurrent income tax payable2,6972,3432,315
Other liabilities1,0071,5221,413
Long-term debt 545,258  470,124  503,018
Total liabilities$818,145 $701,507 $766,659
 
Equity:
Cash America International, Inc. equity:
Common stock, $0.10 par value per share, 80,000,000 shares
authorized, 30,235,164 shares issued and outstanding3,0243,0243,024
Additional paid-in capital157,874167,193167,683
Retained earnings855,972739,256776,060
Accumulated other comprehensive income (loss)4,366(2,352)(6,896)
Treasury shares, at cost (1,214,646 shares, 982,735 shares and
1,011,356 shares at September 30, 2012 and 2011,
and at December 31, 2011, respectively) (46,175)  (35,752)  (37,419)
Total Cash America International, Inc. shareholders' equity975,061871,369902,452
Noncontrolling interest (799)  5,277  5,138
Total equity 974,262  876,646  907,590
Total liabilities and equity$1,792,407 $1,578,153 $1,674,249

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)


(Unaudited)

 
Three Months EndedNine Months Ended
September 30,September 30,
2012 20112012 2011
 
Revenue
Pawn loan fees and service charges$76,500$74,399$221,450$206,134
Proceeds from disposition of merchandise Read Full Story

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